Want to secede? The IRS has news for you

Departing Americans will find it hard to escape the long arm of Uncle Sam.

By Jonathan Berr Nov 14, 2012 3:21PM
Image: US Capitol (Donovan Reese/Getty Images)Residents in 34 states, apparently horrified at President Obama's re-election, have reportedly signed petitions to secede from the United States. Support for such a move in Texas has reached a point where it requires an official response from the White House.

But are supporters of such an idiotic move thinking about the potential tax consequences?

Escaping the long taxing arm of Uncle Sam is difficult and can be expensive. Americans who live abroad still must pay U.S. taxes if they have yearly earnings above $100,000, a policy which has long been a sore point for expatriates. 

Americans abroad are required to file taxes with the IRS even if they don't owe the U.S. any money. Some foreign residents may even still owe state taxes. To make matters worse, U.S. citizens who renounce their citizenship are subject to a one-time exit tax of 15% on the fair market value of all their assets less their basis costs. Giving up a U.S. passport doesn't get someone out of paying any back taxes.

Seceding from the union also presents all sorts of practical problems for states. Texas, which many Texans are quick to point out was for a brief time a foreign country, is a case in point.   Do the 65,000 or so residents of the Lone Star State who have signed the petition believe that the U.S. would just hand over tens of billions in assets such as interstate highways, military bases and border crossings without anything in return? It's doubtful. 

An independent Texas would still need plenty of help from the U.S. The Texas Rangers and the state's National Guard would probably not be able to battle Mexican drug cartels on their own. Thank goodness, most Texans and residents of other states oppose this daft idea, which didn't work out so well when it was last tried 150 years ago.

Though the idea of secession from the U.S. seems tinfoil-hat crazy, wealthier Americans are increasingly renouncing their citizenship for tax reasons. According to Fox News.com, as many as 8,000 U.S. citizens are expected to give up their U.S. passports this year, more than double the 3,805 in 2011. The move can save these former Americans big bucks.

"Some are philosophically disgusted at the course our country is taking, in all kinds of ways," tax attorney James Duggan told the site. "They're making a strong protest of 'enough is enough.' But largely, it's an economic decision."

Perhaps those who want to secede also are disgusted by the direction the country is going. If that's true, they should fight for their beliefs. Those that want to quit the U.S. are like children who take their ball home when they are losing on the playground. It's the ultimate exercise in selfishness.

Follow Jonathan Berr on Twitter @jdberr

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Nov 14, 2012 5:28PM
What a commentary it is that so many people dislike this president to the extent that they want to give up on the America he is president of.
Nov 14, 2012 5:02PM
There is 7000 years of history that will tell everyone that when the taxpayers abandon a government that government will fall. There are usually bloody revolutions before the fall when government try to enforce taxation. It is time to consider tax evasion also. If Obama gets his tax increases watch business move out of America.
Nov 14, 2012 4:53PM
It's not selfishness.  Real americans who don't want uncle sam tucking them in at night are out numbered by  stupid people who keep voting for these losers.  I am just guessing here but I would bet 80% of the poeple who vote for Oblamer don't have a clue of who the rest of the people in office even are.  There should be a test in order to cast a vote.  If you cannot pass it you have know say in an election.  Perhaps if people were made to study and understand the issue they might make better choices. 
Nov 14, 2012 5:16PM

I think the highways were built by the states using money from the Fed who got it from the citizens of the states so it is a return of their money. The military bases they can have. That would be part of the billions of dollars we wouldn't have to help pay for in the Defense Department. The border crossings are part of what is the problem. We could actually properly set up some border crossings.


We would also save our share of the billions in foreign aid given to all the countries that hate us. In fact once we are a foreign country we could apply for foreign aid.


Jonathan Berr, listen to you. Only you know how stupid it is to leave the union. You're so high up on that horse! If you were a real journalist, you'd be looking into why people want this instead of criticizing.

Joke of an article, joke of an author.

Nov 14, 2012 5:44PM
what a ridiculous article. When the 47% become 51%, which will certainly be true in 4 years (or less), the takers will continue to elect their sugar daddy from that point on. How can you fight for your beliefs at that point? Who's going to willingly give up their entitlements? There is no turning back.
Nov 14, 2012 6:32PM

This article is almost as much of a hoot as my other post here.


Jonathon Berr doesn't seem to recognize the fact that if Texas seceded, the residents of the state would no longer be United States citizens, they would be Texas Citizens. Therefore the IRS would have no more authority to tax them as it has to tax the French in France or the Germans in Germany.


Any thought that back taxes wouldn't be dissolved when the political bonds are dissolved must be trying on Mr. Berr's tinfoil hat. There is precedence for this when the colonies seceded from the English.


Yes the original 13 colonies with a population of around five million and virtually no economy made it. Texas with a population of 25 million and the world's fourteenth largest economy would have no problem at all.

Nov 14, 2012 6:13PM
I run a company that helps Americans retire overseas.  Many of the problems mentioned in the article are avoidable.  Also, I would ask the author if his ancestors who came to this country to avoid meddlesome government were being "Selfish".  I believe, given the circumstance, that it turned out fairly well for you sir.  Please check out our site at www.retirement-international.com .  
Nov 14, 2012 5:14PM
Screw the IRS and Obama's tax nazi. It is time to revolt. Socialism is the end of a civilization, not its beginning.
Nov 14, 2012 5:05PM

If 34 states decided to pull out of the Union who do you really think would have an issue. I don't think military support would be an issue. Washington can keep the debt after all it theirs I didn’t spend any of that money. Will take the rest you have good luck when the China comes knocking. Anyone who thinks that any state or if a large group of people leaves the union, are going to pay taxes might want to rethink that.

Nov 14, 2012 5:27PM
Those that want to enslave the U.S. are like bullies who take other children's lunch money on the playground. It's the ultimate exercise in collectivism.
Nov 14, 2012 6:14PM

Slowly but surely it is dawning on people this election was a scam.....We've been hoodwinked on a massive scale.   You don't have millions turning out in support of Chick-fillet, the largest turn-over in elected officials in history only two years earlier, neighborhoods accross the country with a 17 to 1 Romney yard sign advantage and expect me to believe this was legitamite.

Precincts in Pa. where obama get 142% more votes than residents that live there.  Ohio precincts where Romney got zero votes? And I'm supposed to believe the happlles, ruderless, clueless, muslim communist won the hearts of the majority of thinking people?


Nov 14, 2012 5:49PM
I thought the point of secession was NOT to be subject to IRS tyranny.  Don't see secessionists asking please.
Nov 14, 2012 6:41PM
The fact that we are reading this article and the movement is becoming nationwide shows we have serious problem. As one prime minister stated " The problem with socialism is sooner or later you run out of other peoples money". Punishing successful people will not help unsuccessful people become successful. Education and work ethic leads to success. not government handouts. And finally 2% of the people cannot support everyone 
Nov 14, 2012 5:55PM
Feds are not doing much to help Arizona and it's border.  Thought the adminstration had cut off all their help.  Half way there!
Nov 14, 2012 6:09PM
The US has a long history in supporting Self Determination.  When the baltic states left the USSR, the US supported the move.  Why would it not support this move too?  Why is this different?  And for the $ owed by the citizens of Texas, that would have to be offset by the $ sent to Washington to pay for it.  Looks like Washington would owe Austin if they wanted to play that game.

" It's the ultimate exercise in selfishness."   Or they may think the deck is stacked against them as some articles suggest.  


Areas with 100% Obama votes are pretty much suspect especially when an article stated a person had to try three times to get her vote cast for Romney before she could accept the ballot.  


Maybe these people don't like killing babies, living off the Gov't or perhaps they feel the money they earn is theirs while taxes are too high.    There are many reasons they may choose to secede other than for selfish reasons.  They just may feel overwhelmed at this time.

Nov 14, 2012 11:05PM
Take a good look at yourselves, you are part of the problem. If education or the lack of an education is why people voted for President Obama, what's your excuse for keeping the same old crooks in congress. One man does not control everything, that is why we have a judicial, legislative and expectative system for checks and balances. Our congressional leaders are millionaires who pay minimum rates for insurance, but refuse to allow the american public that same benefit. This country has turned away from it's traditional God given values for the micro wave lifestyle, If the taxes go up, all the blame does not fall on the presidents shoulders, look at all the fat that goes to things like the bridge to nowhere, the rain forest project to be built in Iowa (wrong state) saving beetles or owls etc. Every congressman wants money for his state and will get it at any price. Before you complain about one man take a good long look at the other 500 or so in congress, boycott their decisions. Now that is where change is really needed.  
Nov 14, 2012 6:26PM
If Texas were to secede they should be able to lay claim to their portion of federal assets in other states, while they give up some portion of federal assets held in their state. This includes national parks, military bases, federal highways, and the like. The net may not be as large as the author implies. 
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